Anthony LaFaziaCEO, Atlantic Training · CEO at Atlantic Training | EdTech & Safety Compliance Leader

FTC Disposal Rule: The Federal Law Behind Secure Data Destruction

14 Jul 2026 · 2 min

Watch on YouTube

2:13

In this video, Speaker A explains the legal framework governing the secure destruction of consumer information in the United States. The discussion begins with the 2003 Fair and Accurate Credit Transactions Act (FACTA), which became effective in June 2005, and the subsequent FTC Disposal Rule that enforces FACTA’s requirement to prevent unauthorized access to consumer data after its business use ends. The FTC’s purpose is to stop identity thieves from retrieving discarded credit reports or other personal data. Speaker A clarifies that the rule applies to any person or entity that maintains consumer information for business purposes, providing concrete examples such as employers conducting background checks, landlords screening prospective tenants, and universities assessing financial‑aid eligibility. The speaker emphasizes that the obligation is tied to the possession of data derived from consumer reports, not to the size of the organization, and mandates proper destruction methods. Interspersed is a promotional read by Speaker B for Atlantic Training’s Wave management platform, which offers HR and soft‑skill training, onboarding automation, and leadership‑development tracking, with a free software offer for plan subscribers. The overall content serves to inform viewers of their compliance responsibilities under FACTA and the FTC Disposal Rule while also delivering a brief advertisement.

Chapters

To understand your obligations, we'd look to 2003 when Congress passed the Fair and Accurate Credit Transactions Act, or FACTA, which took effect in June 2005. Pursuant to FACTA, the FTC issued the Disposal Rule. The FTC is very clear on the purpose: to prevent unauthorized access to or use of consumer information after you have finished using it. Simply put, they don't want identity thieves dumpster diving behind your office, retrieving a credit report you casually discarded, and using it to open a line of credit in someone else's name.
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According to FTC guidance, the disposal rule applies to any person or entity that for a business purpose maintains or otherwise possesses consumer information. Do you run background checks on new employees? This rule applies to you. Do you check credit scores for prospective tenants? This rule applies to you as well. Are you a university assessing financial aid eligibility? You are absolutely subject to this rule. The government is not interested in your headcount. They are interested in your filing cabinets. If you possess data derived from a consumer report, you have a legal obligation to destroy it properly.